When I was in high school, I wish there had been a Lifeskills 101 course or at the very least, a filing taxes for dummies course. I know that I would have appreciated the information especially when it came to how to fill out my tax form, figuring out my filing status, and most importantly- when to file my tax return.
Of course, I knew that I had to file before April 15th but it would have been nice to know that I wasn’t limited to just filing before the deadline.
As an aspiring work at home mom, I’m also going to be looking into filing as a business but that can wait for next year. I’ll share some tips for home business taxes later on in this series. Next week, we’ll talk about what type of form to use and whether or not you should file your taxes online.
And in the meantime, you can take a look at my tax tips for work at home moms (and bloggers) if you want to see what I’ve been able to find out so far.
When to File Your Tax Return
Originally, the deadline for completing and filing your individual income tax was not April 15th. In the beginning, it was first set for March 1st. Then, during 1918, Congress pushed the date out to March 15th. Then, in the great overhaul of 1954, the date was once again moved forward to April 15th, and this is where it remains today. But, it has only been set this way for a little over 50 years.
That’s not very long, in historical terms, and it could possibly be changed again.
If you are an individual tax payer, you are required to file either a return or an extension of time to file (Form 4868) by April 15th.
Corporate and other legal entities are required to file their tax return by March 15th, and if not, they also must file an extension of time to file. What this extension does not do, is to extend the amount of time you have to pay any taxes due the government.
So, if you are unable to ready your personal or business financial information in a timely manner, and have no reasonable estimate as to the amount of tax you may owe, you can expect to pay some form of penalty.
To file your tax return, either you or your tax professional will need a number of documents.
These can include tax forms from your employer, invoices, receipts, and statements of interest from your bank. Although all of these documents are fairly common, you might not be able to produce them on short notice. The deadline takes on added significance because it establishes a timeline for you to get organized.
If your taxes are being prepared by a professional, you will want to provide them with your documents far in advance of the deadline. The work they need to do takes time. It is unlikely that they will be able to prepare your return overnight if you provide them with your documents at the last minute. With this in mind, you can plan accordingly.
Collect your receipts, invoices for your business, or employer-provided tax forms and put them in a legible order. This will make the process much easier when you hand your documentation over to your tax professional, or when you set about filing your return yourself.
Currently, all the tax regulations for this country are the responsibility of the Internal Revenue Service, and there are four major divisions of this government office: the Wage and Investment, Small/Business Self-Employed, the Large and Midsize Business and the Tax Exempt and Government Entities.
Each division has responsibilities as they pertain to their individual specialty.
How to Determine Your Tax Filing Status
Knowing how to determine your tax status, and knowing the difference between each group will help to make filing your income tax return go smoother. Here we will discuss the ways in which you determine which status to file under.
There are five classifications from which you choose to file: single, married filing jointly, married filing separately, head of household or qualifying widower with dependent child.
If for any reason, more than one status applies to you, you should choose the status that gives you the greatest tax benefit.
Determining your status as a single filer seems simple enough, but there are different situations that exist that can qualify the taxpayer as single.
For example, if you are legally separated even in the last month of the year, you are considered single for the entire year. With no dependents and you are unmarried, you are considered single. Divorce and annulment within the year also qualifies you to file as single.
However, even if you are single, but you have a dependent, or were widowed during the tax year, and you have dependents, your filing status would change to head of household or widowed with qualifying dependent child, not single.
When it comes to determining your status as a married taxpayer, there are simple qualification assessments that establish your legal filing status and if you’re considered married. Obviously, if you are legally married and living together as husband and wife, even for a small part of the tax year, then you would be considered married.
If you are living together as common law spouses, and it is legally recognized in the state in which you live, or you lived part of the tax year in the state where the common law marriage began, then your filing status is married. Your filing status is still married even if you are married but not living together, but are not legally separated or divorced.
If you have unique circumstances, it might not be so easy to determine your filing status. If, for example, you were widowed during the tax year and did not remarry, you can file as married with your deceased spouse, and then file as widowed with qualified dependents for the next two years, so long as you do not remarry.
If you remarry within the tax year that your spouse passed away, you would file as married with your current spouse, and file with your deceased spouse as married filing separately.
If you are married and want to file a joint return, your tax status is married filing jointly.
All income to the household must be included on the one return, and both spouses must sign and date prior to submitting the tax return. All exemptions, deductions, and credits are reported on the joint return, and you share equal responsibility and liability for the information reported on the tax return, as well as any tax money owed. There are ways to ask for release from joint responsibility, either through innocent spouse relief, separation of liability for spouses who have not lived together for the past year, or equitable relief.
There are sometimes reasons that a spouse cannot sign a joint tax return, such as a spouse stationed abroad for the military. In this type of situation, you may sign for your spouse as a proxy, and attach a written explanation.
Choosing your filing status, while lengthy and sometimes complicated, is an important in the process of completing your Federal Income Tax return.
I hope that this clears up some of the confusion when it comes to filing taxes! Be sure to join me next week when we take another step into exploring the world of the federal income tax return.
Making plans for your tax return? Here’s how to stretch your tax refund.